The Art of Adjusting® Podcast
Dive deep into the world of insurance claims with our podcast, newly rebranded as "The Art of Adjusting®"—a title echoing the revered book of the same name. This revamped podcast is not just a beacon for professionals navigating the adjuster landscape but also a wealth of insights for those curious about the intricacies of the industry.
We're thrilled to announce that Bill Auten, owner of Auten Claims Management, will now share the mic with a stellar co-host, Chantal Roberts. Chantal isn’t just the brilliant mind behind the book 'The Art of Adjusting®'; she's also the powerhouse owner of CMR Consulting. Together, this dynamic pair will decode the complexities of various claims, from property and auto to liability and workers’ compensation, providing unmatched expertise and invaluable insights for our listeners.
In our recent episodes, we've explored a range of riveting topics, offering a deep dive into the technicalities of claims, showcasing transformational journeys within the industry, and illuminating the art and science of policy decoding and investigation. Special guests, including industry veterans like Steve Frattare, have graced our platform to share their extensive knowledge and experience, shedding light on a multitude of areas within the claims adjusting world.
Subscribe to “The Art of Adjusting®” to keep abreast of the evolving landscape of insurance claims. Share our treasure trove of episodes with colleagues, friends, and anyone with an appetite for understanding the captivating, multifaceted world of claims adjusting.
For more insights, you might consider a career in liability adjusting or if you're searching for reliable adjusting services:
Visit: Auten Claims Management
To explore more about Chantal Roberts and her contributions to the industry, visit:
Visit: CMR Consulting
Promotions:
- Once Upon a Claim: Explore the magical world of claims adjusting through fairy tales. Get your copy now.
- The Art of Adjusting®: Master the art of claims adjusting with practical insights and expert advice. Purchase here.
The Art of Adjusting® Podcast
Episode #77 - The Myth of the Bad Faith Boogeyman
Not every denied claim is bad faith. Not every mistake is a lawsuit waiting to happen. So why does it sometimes feel like “bad faith” is lurking around every corner?
In this episode, Chantal and Heather Blevins (The Insurance Rebel) tackle the myths and realities of bad faith in insurance claims. They break down what bad faith really means, why the definition changes depending on the state, and how adjusters can protect themselves with strong documentation, timely communication, and clear reasoning.
You’ll hear stories from the field, the dangers of relying too much on AI or “black box” tools, and why emotions—both yours and the claimant’s—can turn a routine claim into a reputational nightmare. Most importantly, we’ll talk about what’s just hot air…and what really puts you at risk.
🎧 Tune in to cut through the noise, learn the real red flags, and walk away with practical strategies to keep your claims in good faith.
For more insights, you might consider a career in liability adjusting or if you're searching for reliable adjusting services, visit Auten Claims Management.
To explore more about Chantal Roberts and her contributions to the industry, visit CMR Consulting.
Promotions:
- Once Upon a Claim: Explore the magical world of claims adjusting through fairy tales. Get your copy now.
- The Art of Adjusting®: Master the art of claims adjusting with practical insights and expert advice. Purchase here.
I'm Bill Auten of Auten Claims Management.
Speaker 2:I'm Chantel Roberts of CMR Consulting and welcome to the Art of Adjusting podcast.
Speaker 1:Today we're going to talk about life as an insurance adjuster from the perspective of property, auto liability or workers' compensation adjusters. Our goal is to bring interesting topics in the world of claims adjusting to people who are working as an adjuster now and to people who are considering a career as a claims adjuster.
Speaker 3:Hey Heather, how are you?
Speaker 2:I am fantastic this Friday Friday morning I've got my Kansas City Red. We do Red Fridays for Kansas City Chiefs. Yeah, go Chiefs. I'm not really into football or anything like that, but I just thought I would, you know, record with red, even though we're going to release on a Thursday. So who knows? I mean it doesn't matter, yeah, but I love your background, it's a little spooky, it's a little, but it's. I mean, it's beautiful. It's a little spooky, but we're getting into that holiday. You know October theme. I love it.
Speaker 3:Yeah, absolutely my one of my favorite times of the year. I'm definitely a fall girl. I love the, I love the leaves and the trees, and then like just the smell in the air. Something about it Just like calms my soul, mm hmm, absolutely so.
Speaker 2:So today we're going to continue on from, like last episode, where we talked about the unfair claims practice and unfair claim settlement acts and that sort of thing. But we're going to continue on, and this time we're going to talk more about the myth of the boogeyman that bad faith is, because I think a lot of times adjusters get scared of you know quote unquote bad faith and what it is. So I thought maybe we could kind of break it down like yeah, there are all these rules, but even if you break one of these rules, it doesn't necessarily amount to bad faith, absolutely.
Speaker 3:I think it's a, I think it's just a. It's almost like a commonly known adjuster scary story of oh my gosh, I can't. I can't be accused of bad faith in any circumstance, and the reality is, is you're probably going to be yeah, absolutely yeah, and so you kind of just have to like reckon yourself to that as you're handling claims and you know, realize that the boogeyman might not be hiding underneath your claims files, right, right.
Speaker 2:Absolutely. Yeah, I even said in the book, like, look, just get prepared, you're going to be sued, you're absolutely going to be sued, just get prepared for it. But the way that you can protect yourself and your employer is, of course, document, document, document, which we'll talk about later and communicate, communicate document, which we'll talk about later. And communicate, communicate, communicate, which we always have been talking about on this podcast, you know so, you know me. I like to start off with these definitions of quote. What is bad faith? You know what is bad faith? And the answer is the very lawyerly, the one that I always love. That coverage attorneys say is it depends, and I'm like I paid you $1,000 for two words. I mean, honestly, I feel that I could pass a bar exam, because the answer is it depends.
Speaker 1:Every time.
Speaker 2:Every time the answer is I don know. Is that it depends?
Speaker 3:anyway, I know I I can't tell you how many times in my insurance adjusting career I heard the words it, it depends, and then it became like my mantra, because you know you get agents that call you well is this covered? Is that covered it? Oh, wait a minute, I know you're calling me because you know something that I don't know right now. And how about it depends and turn in the claim?
Speaker 2:Yes, yes, oh my gosh. Yes, okay, can we talk about that? Absolutely, but what kind of started? This, too, is Michael Young, who is an attorney on LinkedIn and in St Louis. And, by the way, guys, if y'all don't follow him, I do recommend that you do. He has a lot of good information, not just for Missouri but throughout the whole United States, and he really is able to break down a lot of ideas, legal concepts and everything.
Speaker 2:And basically the reason why I'm being facetious and saying you know, the definition of bad faith is it depends, is Michael Young stated, quote each particular claim is obviously fact specific. You know, hey, obviously, like what? Adjuster doesn't know that, and insurer conduct that might constitute bad faith in one situation or state may not qualify as such in another period. End quote. So basically, what he's saying is it's a legal definition.
Speaker 2:It varies from state to state and as an expert witness, I know that I have seen that happen a lot. In Missouri, it happens to be something to the effect of like torturous interference with your claim or your, your, whatever, and in Colorado there's a whole different set of facts involved and basically it all boils down to these context-specific issues, not an automatic violation. We talked about the Unfair Claim Settlement Practice Acts. And look, you know, if you forgot to send that 30-day letter, or you I don't know didn't settle a claim for 45 days instead of 30 days or whatever. If you did that once, that's not bad faith. What constitutes bad faith, pretty much in every single instance, is you repeatedly doing that, and by you I mean the insurance carrier, the insurance carrier repeatedly doing that, and by you I mean the insurance carrier, the insurance carrier repeatedly doing that.
Speaker 3:Yeah, definitely you have to see that pattern of behavior and in either a particular adjusters, you know context if you happen to be an independent adjuster, or you are a carrier that just has repetitive practices or maybe, like you, have policies in place that are are enabling bad faith actions by your, by your employees as well. So, yeah, it's definitely very much a it depends context, specific situation, state by state, and just like we talked about on the last one with the unfair claim Claims Settlement Practices Act, those particular acts are very different state by state by state as well. And I know, you know, folks here in the United States don't realize Well, we do, we realize how complicated insurance is because everything's different state by state by state. Right, people from Europe a lot of times are kind of like well, wait a minute, you, you all, don't have like like national, national guidelines and well, we have, like you know, certain types of legislation that control certain aspects of insurance.
Speaker 3:But because every state is every state and that's the reality today is you've got adjusters out there who are handling multi states. They're not just their local backyard people who might be handling only one state at a time. Those people are still out there. But the reality is because the way claim handling happens today, you've got to have a good knowledge and understanding of what are the requirements in the states that I am working and the requirements that are on me in front of my desk. So educate yourself is what I have to say.
Speaker 2:That is so important. I'm so glad that you talked about that and I would encourage the adjusters who are handling multi-states and again, I keep fantasizing that some CEO will be listening to this and you know want to educate his claims or her claims department, and the deal is hire an attorney. Actually, you don't even have to hire an attorney. They will do it for free and they'll bring lunch, which your claims adjusters will love to have an educational event educating the adjusters on what the new rules are, because the rules do change every once in a while because a verdict has come out.
Speaker 2:So now it's not necessarily that the legislation has changed, but maybe the rules of engagement have changed. And it is hard, let me tell you, to keep up with all of those, because I have licenses in almost all of the states that require them not not every single one, but almost all of them and for me to keep track of all of the new, you got to do this and you got to do that and did it. I cannot keep that up anymore because it's it's just me and the iron claw who was my office manager and he doesn't really do a lot. Uh, to be honest with you as the office manager. Um, he is really more wanting to find out where the money is, uh, so that he can go buy some milk or whatever. I have no idea what he does with the money?
Speaker 3:Yeah, no, I would. I would be remiss here If I didn't mention Mr Bill Wilson and RTFP. And this isn't about reading the insurance policy. This is about reading the policies as they change or evolve whenever there's some verdict or legislation that might influence what bad faith rules are at any given point. So definitely, rtfp, shout out to Bill, go Bill.
Speaker 2:Keep it real. Yeah, and again, I've mentioned Bill many, many times. If you don't know Bill Wilson, follow him on LinkedIn. He has a blog. Follow that. Get all of that information. Guys, let me tell you just, he's a wealth of information. He will have forgotten more information than you and me put together. Oh yeah, yeah, absolutely so, you know, there there is, I think, a lot of of younger adjusters or newer adjusters who start out and they do have this fear of of bad faith and it's kind of tossed around a little bit, which we will talk about a little bit, but, um, like, maybe in negotiations or whatever, like I'll sue you for bad faith or you know whatever. So let's kind of talk about what hot air is versus what your real risks are. And and, heather, if we as the carrier or as the insurance adjuster, deny a claim, is that going to be considered to be bad faith?
Speaker 3:Absolutely not. It's not an automatic that if you deny coverage, that it's bad faith. The real risk, the reality here is that you can't deny a claim without a reasonable investigation and you also can't deny a claim and like misrepresent what the coverage facts are in any given circumstance. So go back to reasonable investigation. Well, that word reasonable is used a lot in insurance, right? What does a reasonable investigation mean?
Speaker 2:Nobody knows, nobody knows, it depends.
Speaker 3:Oh yeah, once again, every claim is different, and that's where I talked about this in our last one as well. Don't get into that mindset of oh well, because this is a water claim and I've handled, you know, 50 water heater losses in the past month, that this next one that comes across your desk is going to be exactly the same. If you start to get in that trap of thinking that every single claim is the same.
Speaker 2:You's okay to make a mistake, a, an endorsement or whatever and denied the claim. But as soon as someone points that out to you, if you, you know, don't, look at that. That is your real risk. So again, there's a kind of a yin and a yang, I think, of these sorts of things yeah, I mean, I don't want to go too far down a rabbit trail.
Speaker 1:Oh, let's do it.
Speaker 3:But when you talk about making mistakes, we're human beings. Okay, You're human beings with judgment that you apply to a given set of facts and circumstances and apply the coverages the way that you do. Well, what about AI today? What about the implications of files rolling through and unfortunately, there's been folks that have gotten themselves in trouble by, like auto denying things utilizing AI to scan the information that comes in the door on the first notice of loss.
Speaker 2:Yes.
Speaker 3:And to me, I think there has to be caution. Ai is an incredible tool, folks, especially in the claims world, where volume is just the name of the game, but you have to be incredibly careful to not cross that line of allowing AI to do the things that are required by law to be done by a human being.
Speaker 2:Right.
Speaker 3:Let's be careful because I can I can almost predict what might happen here, with multiple bad faith claims and like who do you sue when it's an algorithm?
Speaker 2:Well, you know, we have experienced that in insurance before and it was oh, what was that? What was that thing called? It was for BI bodily injury, colossus. I was at MetLife, metlife used Colossus and the idea was that we put in all of this you know ICD-10 codes or nine at the time, which are these codes that the doctors would use to say this is specifically what the treatment was. You would put in the CPT codes. I think I'm saying that right, the ICD are the treatments in that CPT are the injuries anyway. And then you would basically type in what treatments there were and it would spit out like, oh, you've got a sprained ankle. You can't treat for three months on a sprained ankle, you know, and that sort of thing.
Speaker 2:So there was a huge lawsuit in that. A lot of people were considering it to be biased, even though the thought was it's not going to be biased, it's going to treat every CPT, 1000 the same, or whatever. But again, humans are making it, humans are feeding the information into it and it's like that garbage in, garbage out, g-i-g-o kind of deal. And I was actually talking you mentioned about the AI with claims and everything, and I was talking to one of my students about it and we were talking about policies and how policies are really not reader friendly for the average consumer. And the student had this great idea. It says why don't we just pop it into AI and have AI tell me a summary of what my you know coverages are and things of that nature? And I'm like you know what Great idea, except for when AI eats some mushrooms and starts hallucinating.
Speaker 2:And yeah, you know. And so what are we going to do then? Because here's the deal you as an insured will be like well, you know, my AI says that blah, blah, blah. And I'm going to say, as your adjuster, look at page seven, you know. Um. So that is also about misrepresenting coverage facts. You can't sit there and scan in the estimate, for example, into chat, gpt, and then say, hey, what's covered, what's not covered, here's the policy, and then start, I don't know, cutting the estimate or whatever. That might be bad faith, because then you're not doing a reasonable investigation. You actually have to physically use your eyes. Now, can you use a tool and go over the tool, maybe override the tool? Absolutely, absolutely. That wouldn't be bad faith. So are you hearing that it's a judgment call? Yes, are you hearing that it depends? Yes, that's what you're hearing.
Speaker 3:Yeah, you know I was going to step us into the next hot air about bad faith. If you don't pay what they want, it's bad faith I see that.
Speaker 2:I see that a lot as an expert witness. Um, there is, you know, I get a lot of these lawsuits that will say you know, the insurance company has caused the insured to file suit to get the amount of money that they're supposed to get. And of course that's one of the unfair claim settlement practices. You, as the insurance company, are not supposed to cause the insured to file suit to get the money that is owed to them. And so many a plaintiff attorney or policyholder attorney will say you didn't pay or you lowballed us. Therefore it is bad faith.
Speaker 2:According to this law, right here, in whatever state you're in, they will pull that up. The issue is again having a reasonable, documented basis. Again, what's reasonable? It depends. And who's going to be able to determine that? A jury or the judge? I mean, that's who, that's really who's going to be doing it. But here is not, here's your deal.
Speaker 2:If you document and this is what they told us, even with this Colossus deal you know if we disagreed with Colossus because I was handling low impact bodily injury claims and so these people would be treating for three months for whiplash or whatever when the property damage was $500.
Speaker 2:So that Colossus would come in with a settlement of, I don't know, $7,500 to $10,000. And I would have to type in Colossus is $7,500. But because this is a low impact claim, my valuation of this, based upon the physical damage of the car, is $1,500 to $2,000. And so that way I have put in what my thinking is which, by the way, guys, is one of the regulations or not regulation, one of the requirements from the department of insurance. You have to put in your thinking so that the Department of Insurance can recreate your thinking. And so, just saying, you got an estimate for $5,000. I don't, you know, I'm going to send out a payment for 4,000, or I'm going to send out a payment for 3,000, but you don't tell me how you get there. That's not documented. You've got to document better.
Speaker 3:Yeah, you have to do a good job of making sure that a story is told, yes, from beginning to end. This is how the decisions were made and this is the documentation, the facts and the evidence that support the decisions that you're making. Now I get it Like it's difficult to think about. Okay, what's going on in my brain while I look at this stuff and put it out there? And sometimes there's some things that might be in your brain that you may not. You're like because you're frustrated or you get upset about something or like this is stupid. Please be very careful about how you think, about what you're putting in a claim file note.
Speaker 1:Right.
Speaker 3:Make sure that you're documenting how you came to the decisions that were made. Not received estimate. You know, wrote, wrote a check for this amount of money. That's thousands of dollars less than the estimate. Somebody's going to look at that and go well, is this a pattern of behavior that this particular adjuster has, where they're just automatically sending out less than what estimates are and, trust me, they can get all the documentation that they need to be able to try to prove that as well?
Speaker 2:Listen, this is the whole reason why we had that huge 60 minutes expose and then Louisiana passed the law that's going to go into effect July 1st 2016,. I think that says if you change anything in the estimate, you've got to explain it First of all. Guys, y'all should have been explaining it in the first place. This is the thing that I've been drilling into everybody all six listeners in this whole thing and, by the way, share and subscribe and all that kind of deal, so we can have more than six listeners. But why are we getting bad law passed? It's not necessarily a bad law, it's a misnomer. It's a great law. But why are we being told what we need to do? Law? But why are we being told what we need to do? We all should know to break that out. But anyway, I digress, I'll get off my soapbox.
Speaker 2:However, it does bring up another good point is, you know, ignoring any kind of evidence that comes in. If you don't pay that again, if you don't pay that again not necessarily bad faith. If you ignore it, that could be bad faith, absolutely Not that you don't pay it. What will happen is they'll send you like we've got all of these receipts, blah, blah, blah. And if you don't go? I've acknowledged these receipts, I've looked at these receipts. I don't think they have anything to do with this particular claim. Here's your letter of declination and what policy language goes with. I don't think this has anything to do with this claim. That is when you get into bad faith and I have seen it time and time again and again, speaking of denying claims. When we're talking about denying claims, you do have to, in almost every single state, quote the policy language. So don't send an email saying that ain't covered. That's right.
Speaker 2:Do not send an email that said ain't covered. I guess you could send an email that says ain't covered, but I'm going to send you a letter of declination soon, but just a T L D R. Uh, you know, ain't covered. You got to send a letter of declination and tie it back to your uh policy language. Don't ignore the evidence. And again I'm going to say, too, I will. I will again, it depends Say that this doesn't mean that you have to run down every single rabbit trail. You know, oh, I'm going to give you that receipt. I'm going to give you that receipt, but you should acknowledge every single one, because the minute you don't, I get pulled in here and I've got to put in my file. Yes, they, you know, acknowledged five of the seven, but they didn't acknowledge these two. And goodness knows, the lawsuit is about those two receipts that you did not send an acknowledgement on, even if it's thanks for this, I don't agree. We'll send you a denial letter, whatever. Whatever you do, and be sure to put it in your file notes.
Speaker 3:Yeah, 100%. And then don't get caught in that trap of I'm going to accept in maybe some evidence that comes into a claim file and then I'm just going to pretend like I'm going to work it later. If you, if you have because that number one, that's just bad time management practices whenever you're a claims handler. But the other piece of that is that if you routinely do that, it looks like you're ignoring evidence, you know, and then you might not be responding in the right amount of time to those things that come into the claim file and that can be seen as delay. That can definitely be seen as delay.
Speaker 2:And I have seen that a lot of times too in claims files, where someone will get something, uh, you know, let's say on the first and they don't respond until the 10th, and I'm like uh, you what happened?
Speaker 3:Yeah, I listen, guys.
Speaker 2:I just attended.
Speaker 2:I just spoke at a web or a podcast where I was talking to the host beforehand and I said you do know that adjusters have like 300 files, which means we have 300 insurance calling us, which means we have 300 appraisers or field adjusters calling us, which means we have our manager breathing down our neck. Uh, you know, which may mean that we also have a couple, maybe, I don't know 150 public adjusters or attorneys or whatever you so what? What am I up to now? Like 750 people calling me at any given point in time and then, granted, they won't all call me on one day, although it does feel like it, and granted, they don't all send me emails on one day, although it will feel like it.
Speaker 2:But and she goes, I had no idea that claims adjusters have that many files. And I'm like, oh yeah, I mean we're the redheaded stepchildren of the insurance world and both you and I can say that as redheads. Yes, okay, and, and I said, if there's ever a hiring freeze, it is not an underwriting or the agent part of it, because the C suite believes that's where the money is made.
Speaker 2:It's going to be in the claims department, where they believe money goes out. So everybody has to make do with less. So, yeah, you get like 30 emails a day with all of this information and you can, you can, and then you get five claims and look, if it takes an hour to set up a claim, that's already five freaking hours, which leaves you three hours to return phone calls and emails. There ain't enough time, but I digress. Point is that if you cannot absolutely answer it that day which let's acknowledge the fact that we cannot right, let's just acknowledge that Again, what I would recommend is use the tools that are available to you, Go ahead and put it over into your file, because I like a clean inbox, but then I would make myself a calendar note saying respond to such and such and such and such, and I would put it out for 48 hours so that I would make sure that I would get it done within 24 to 48 hours.
Speaker 2:But that's me, you know. Do whatever it is, but don't wait 10 freaking days, because failure to communicate, as we've seen last podcast, is uh. At least that you're moving your file towards closure, that you have this and that you will take a look at it. Within 10 to 15 business days you'll get back, and if you don't hear from me, call me back. You know blah, blah, blah. Give them a timeframe, set some expectations, but silence is when people are going to think you're ignoring them, and you know that's quote, unquote, bad faith or whatever.
Speaker 3:And, on top of that, what will happen is is that's going to only traffic more calls and emails back into your desk, which is going to put you into this constant status of trying to dig yourself out of a hole, which will create this whole situation of delay for you, not only on that one claim file, but on the 299 others that you have as well. Right, don't leave yourself in that position where you're constantly, you don't communicate, you don't tell people where you're at or what you're doing. You know, even if it's just I have, you know, a quick email that says I received this documentation from you and I'm in the process of reviewing and then setting the expectation with that customer or whoever sending you that information, I will be back with you in the next 48 hours. You know, even if you have to give yourself 48 hours to respond.
Speaker 2:You know you said that and was an automatic email that got sent out when they received something, which is and again, it was a generic form letter, but it said so-and-so has received your letter, they will be back in touch with you within 24 to 48 hours. And that was kind of nice. It papered the file but it was really annoying to see that over and over again. But it was really a nice to say, okay, I've got to send it back to the insured or whomever, saying I've got this, um, I'll be back in touch. Uh, it might be better from the, from the adjuster, saying you know, 24 to 48 hours, whatever. If you don't hear from me, give me a call.
Speaker 2:But we've talked about before with communication that whole hour long phone call when you not an hour long phone call, but the 30 minute phone call when you're talking with the insured at the very first notice of loss. If you have that 30 minute phone call, I know it takes out because you've already spent five hours, you know, setting up something you know, and you only have three more hours to go. But it does stop the phone calls If you give people that expectation, because that was another thing that I was talking about in this other podcast was. You know, we now think with email we can just go, go, go, go go. But we're still human, you know, I still have to go, not anymore. But I've gotten mad at some insureds and claimants where I'm like look, I've got to go to my stepson's basketball game. I am not going to be here at 7pm working your claim, you know. Or, or I have to have a weekend too.
Speaker 3:I got to clean my house, so anyway, I digress and like the, I mean anger sometimes in the adversarial process of a claim, but feels adversarial. It doesn't always have to be, but it feels adversarial at times because number one insureds come in the door or claimants come in the door and they don't understand what's going to happen and what insurance is really designed for some of the time, and that's, you know, that's a bigger, broader industry issue about educating consumers on what insurance is all about and the story has not been told enough. But many times people are angry in the process because they they've been hurt physically, they've lost everything that they've owned, they hurt somebody else and they're scared and they don't know what to do about that. I mean like, so you're meeting people and not the best moments of their life? Yes, a lot of the time. Yes, and but ain't just the anger part of it? If there's anger on the adjuster side or there's anger on the claimant side as well, that's not like a like a standard of bad faith. That's hot air.
Speaker 3:Like people get upset, like you can get emotional about the claim circumstance, right right right you gotta have like full-on harassment, contemptuous attitude kind of stuff treating that customer or that claimant or that insured very differently, like throwing their claim file on the bottom of the stack.
Speaker 2:Which none of us have ever done, have we? No absolutely not.
Speaker 3:You got Bob the difficult claimant and you're like I don't want to talk to Bob today.
Speaker 2:Yeah, you know, just stuff him on the bottom. Yeah, what was it? There was, I think, a movie or something like that, where they were talking about insurance and the adjuster said what are you stupid or whatever? And yeah, that is going to get you some bad faith right there. That is going to get you some fat bad faith. Um so, and and I think Sandy and I talked about anger a little bit too, because we said you know, anger is so close to fear, it is so close to fear and sometimes, when we're afraid, it comes across as anger and the claims process is scary to people.
Speaker 3:Yeah, it is. And I think when you recognize that and then you also put yourself in a place of. I always had the USA Today principle in my mind. What if what I said or how I acted towards a certain person was on the cover of USA Today tomorrow? Would I be proud of myself? Would my mom be proud of my behavior? And so you have to learn how to, and don't get me wrong like I've been in those circumstances where you're like why is this person screaming at me? Or why is this plaintiff's attorney like chewing me out at this moment, right now, whenever I'm just trying to do my job, moment right now, whenever I'm just trying to do my job, it's very you have to pull yourself back from that. And, as Chantel said, we're both redheads. We might have a little bit of the anchor bone in us at times just a, just a tad.
Speaker 3:we're just, we're just fiery is what it is. I guess you know. But, uh, you have to learn to, to put yourself in a place where you're not going to take out your emotions and frustration with the 300 claim files that you have, all the situations that you're involved in on a policyholder or an insured because they are hurt. A policyholder or an insured because they're hurt, they are in a bad circumstance and you're going to be able to get them through that in whatever way that you can. So that's your job is you're like the guide in the dark to try to get that person from A to Z in this really complicated process that they don't understand Right.
Speaker 2:Yeah, and, and I think part of the issue is that, as insurance companies or industries, like you said, we have not done a good job of educating people, and so people believe that we're just standing out there as the tornado is in the background writing checks, you know and uh, that is not necessarily the case, and neither is it the case that even courts agree that you don't have to go down every rabbit hole.
Speaker 2:Like I've said, you don't have to pay every demand. You don't even have to pay the one demand. What you, what you have to do is resolve the claim and explain why you resolve the claim. And if you have a, like a coverage dispute or an honest to goodness valuation dispute, that's not bad faith. No, definitely not. You might have people tell you that it is, but but most courts have come back and said, no, I mean, y'all just had a disagreement, you, you didn't. You didn't agree to disagree. That's why you're here. But you know it's not. It's. It's not the end of the world. You're allowed to make mistakes. You're, you're allowed to disagree. You're allowed to have different interpretations. Now, if you continuously have the wrong interpretation, you probably should have some education on that.
Speaker 3:Yeah, definitely, and I know we talked about this last week like we had the UCSPA unfair practices. That is like the regulatory framework stuff that's around state by state, associated with how you can fairly and justly get through the process of a claim with an insured, and maybe some some policyholder rights acts. I know there's some States that have those as well. Yes, bad faith is a higher, like I call it, like the higher level. Give me that higher love.
Speaker 2:We're going to do another singing episode, you and me. Oh, what is that about? Okay, never, sorry, sorry, sorry, sorry.
Speaker 3:Don't be. Don't think that because you make honest mistakes as an as an adjuster, that automatically you've got bad faith. You, I, I made the wrong call on a hail claim. You know, I, we had a dispute about what the what was wear and tear and what was hail. Those are not bad faith situations, they're just disagreements.
Speaker 2:Right, yeah, and and war story. War story that happened to me when I was a baby adjuster is I happened to have a hail claim you mentioned hail claim on a roof and I was like and I assigned a field adjuster to go out there and look at it and he's like I'm not seeing anything. I'm seeing foot traffic, I'm seeing lost granules, I'm seeing wear and tear, you know, towards the end of its life, blah, blah, blah, but I'm not seeing like hail damage.
Speaker 2:And you know, I went ahead and I pulled up the weather report, saw that there was hail in the area. But I mean just that there was hail in the area, but I mean just because there was hail within a mile area doesn't mean that it hit that particular roof or whatever. And so I sent out a denial letter. They got a public adjuster, pushed back and again so listen to what I'm saying they got a public adjuster and pushed back. Had I continued to say, nope, going to stick with that denial, that could have been construed as bad faith. But they're pushing back and they're giving me more information with more photographs from the public adjusters showing this is where the hail damage is and it's over here and it's over there. This is what your IA, your independent adjuster, had missed. So I took that information, got an engineer and you know. So I took information, processed it and then it's not considered to be bad faith, if that makes any sense. So that was that's. It's a dispute. That's my horror story, or my or my, my war story.
Speaker 3:I mean 100%.
Speaker 2:It's a hail, is hails, hails, a big deal United States along the hail corridor, like you and me, yeah, and the tornado corridor tornado corridor of the United States.
Speaker 3:So you have to be you just have to be aware of when new information comes in. You can't ignore it and just say. I'm standing on my denial. You have to accept that information and do something with it. Ok, just like in your instance, you hired an engineer. The engineer said oh, by the way, you were wrong. Oops, ok, all right, you proceeded forth, right Handle that claim and deal with it.
Speaker 1:Right.
Speaker 3:So again, that's being in a dispute. That doesn't mean that it's bad faith, right, right, absolutely. What can be bad faith is you tell a policyholder your policy does not cover this, when it obviously does yes.
Speaker 2:Yeah, like you don't have coverage and I don't know, they have a special form cause of loss, you know, whatever, yeah, that that is bad. That is why, fyi, everybody had all of those lawsuits, those bad faith lawsuits for the pandemic, because automatically the insurers were sending out letters of declination saying there's no coverage for pathogens or microbial whatever or whatever, and here's the exclusion for it, without doing an investigation. But also, I guess it's not really a misrepresentation of facts, like you said, or coverages or whatever, but I guess it's not. Nevermind, I'll just shut up now you go ahead.
Speaker 3:Yeah, no, I just again, don't get yourself in that trap about thinking that everything single claim is going to be exactly the same. Yeah, you have to accept the facts and circumstances of that claim in that specific carved out, bubbled out instance and don't leave yourself in that trap of just automatically denying coverage or misrepresenting what coverage is available. And I always had a good rule of thumb for myself If I couldn't figure it out because I was a desk adjuster for a long time If I could not figure it out based upon the facts that were coming through some photos that might've been sent in, you know I would say look, here's some questions that I have right now that need to get resolved. And I got to get somebody out there to look at this for me so that I'm not in a situation where I'm communicating of this is covered or this is not covered.
Speaker 3:I just need to do some more investigation to figure it out.
Speaker 2:Yes.
Speaker 3:Let the person know that up front it out. Yes, let the person know that up front. Oh, by the way, this leak that you've had going on for 17 weeks that has rotted out flooring and done some other things. We've got to put some eyes on that. Here's some, some concerns that I have based upon the policy language and communicate that. Just tell them that up front so that they're not you know, they're not in that situation where they think, oh, I'm covered.
Speaker 2:Exactly, or oh, I'm not covered you know Exactly.
Speaker 2:You know it's ignoring that fax and ignoring communications or not communicating. The legislation says you've got to communicate with them until you've got to settle within a certain amount of days, or you need to tell them why you're not settling. And I did the same thing. I would get something back and I'm like, ooh, okay, well then I need some more information. So I would send out a letter saying I'm going to look for this, this and this.
Speaker 2:And, by the way, guys, that 30 day letter that you're sending out can't just say I need more time to settle this loss. You have to, and do it for five months on end. You have to specifically say each and every time what you're waiting on. And it is not I just need more time, it's I'm waiting on the engineer report. I'm still waiting on the engineer. I'm about to go down to louisiana and slap them. Um, you know I am driving to louisiana right now to slap the engineer because he's taking too long. Um, whatever, I, you, but I mean it has to be specific, it can't be. I am still investigating this loss anyway. Um know, I think bad faith does, like I said, get weaponized a lot because adjusters are threatened with it and hopefully this has kind of mentioned not everything that we're talking about is, quote, unquote, bad faith. That's why documentation is, of course, your best offense and communication best offense, like we've talked about.
Speaker 3:So you know, and I sat in the seat of being that person who dealt with the extra contractual stuff that would come in the door when bad faith had been alleged multiple times and again it's alleged, there's that word alleged.
Speaker 3:It sounds very legal, right. It just means that there's allegations that are out there, but the burden of proof on what is bad faith, what is not bad faith, varies state by state. Yes, and most of my extra contractual claims that I dealt with were in the state of louisiana and it had a very interesting because everybody knows most adjusters who work. The state of louisiana knows that their law is not based upon english common law. It's based upon what napoleonic code? Darn french people and upside down in the bayou right. Yes, love.
Speaker 2:Love me some louisiana, though.
Speaker 3:I do love louisiana, it's fun but I know that we know and we thought you you mentioned this um at the beginning of the podcast as well like there's a whole new legislation about the state of louisiana associated with bad faith laws and what I was curious about because I was doing a little research on that there is a almost like a reverse bad faith provision in Louisiana right now and I was like, so that what does that mean?
Speaker 2:That means, like there's an alley, there can be an allegation of bad faith on an insured. Yes, so the idea is, of course and nobody really follows it up or anything like that, but I do teach it to my students but the idea is that when you get an insurance contract and when the insured applies for a contract, in their application they're supposed to tell the truth and that would be why the insurer underwrites them, right? So there is this thought that we have mutual good faith, and the good faith goes both directions. It goes from the insured to the insurer and the insurer to the insured. But no one really talks about the insured, the policyholder to the carrier, except for, maybe, fraud. You know, that's when we normally talk about it.
Speaker 2:But if the policyholder is deliberately hiding things and and being contentious, or maybe their representative is, and I've seen that again as an expert witness where the policyholder has hired a public adjuster and again, let's not paint public adjusters with a broad brush or anything, but this particular public adjuster just refused to respond to it, and and they have a whole different set of rules, Okay, Anyway, you know. So in that particular instance that would be like that reverse bad faith and yeah, yeah, it's a, it was just.
Speaker 3:It was interesting to me that maybe the tide has shifted a little bit, in that there's maybe there is some rampant fraud issues that were happening, or maybe there was just so much misrepresentation happening, was just so much misrepresentation happening and now they're trying to, you know, trying to at least help to understand that, yes, there are duties of an insured and a policy, and part of those duties is they got to produce documentation, they have to establish their claim, they have to present their claim. Now you have to thoroughly investigate it and document your decisions, right, right, you have a. I would say you have a higher duty because of the fact that it's an aleatory contract and it's you know. You write it, the insurance company writes it, the insurer accepts it, but there are duties in there that an insured has and so, recognizing that Louisiana is trying to move in that direction of you know, maybe there's no consequences with teeth. There's a provision out there that says you need to not get in this situation where you are misrepresenting what's happening to the insurer in order to get paid.
Speaker 2:Right, yeah, I mean, and everybody is sitting there going well, isn't that fraud? Well, yes, but also, I think it's reworded just a little bit different so that the policyholders are now realizing that, oh crap, I can. Zalma Z-A-L-M-A Barry Zalma has tons of videos, newsletters, books, all of this kind of thing, and he is the guru of insurance fraud. He will say that, after tax evasion, insurance fraud is the second most committed white-collar crime in the United States. Insurance fraud is the second most committed white collar crime in the United States. So that is what we are talking about in this particular instance. So, yeah, it makes sense that states are now sitting there going yeah, policyholders, you, you just can't sit there and have a Christmas wish list.
Speaker 3:Yeah, and I think that's also another piece of consumer education.
Speaker 3:And maybe Louisiana's effort with this is a little bit more about consumer education of here. Here's a one of the main drivers why your premiums are so high in insurance today because of dollars that have to flow out the door, because insurers have been put in this situation where they're constantly fearing bad faith so they don't go after fraud claim, true fraud claims or even the soft fraud that is adding a loss. So again, it is a there's just a tightrope that you have to walk there, but I feel like that adjusters need to know what they have to do, chantel, in order to best avoid not just not the allegations of bad faith, because those are going to come, but actually like being found that you have committed bad faith or that your insurer, you know the company, is guilty of bad faith. So what are some good things that adjusters can do?
Speaker 2:Well, as always document, document, document and communicate, communicate, communicate, because I'll tell you in when I'm reviewing a file and I get the insurer file and I will read the adjuster notes and I will see these emails come in and weeks will go by, sometimes months will go by, before they're responded to and I'm like oh it's just like this If it's once, it's okay.
Speaker 2:If it's repeated over like several years, there's a problem there. Because, remember, one of the first lines of that is if it gives rise to a repeated practice and everything. So that's what we're looking for. Is that repeated practice? And so again, mistake not a problem, Difference of opinion not a problem. But you do something repeatedly, there's a problem, and so you've got to investigate thoroughly. You've got to document your decisions, and so you've got to investigate thoroughly. You've got to document your decisions.
Speaker 2:And side note, this is one of the reasons why I really hate the cut and paste of an email into the claims notes, Because A the email is already in the document for me to find. But again, the rules are from the Department of Insurance. You have to put your thoughts in so that the Department of Insurance can recreate your thinking, you being the adjuster. So you just cutting and pasting an email into the file notes doesn't recreate your thinking. What recreates your thinking is received email from Mrs Insured who asked about X, Y, Z. I have responded with ABC because of element OP or whatever I, you know, whatever, I don't know. So, and then communicate, communicate, communicate. I think you and I talked about this last week. There is one particular file that I happen to be working on and the adjuster and the insured attorney, I think, sent 17 emails in one day and by the seventh one, I'm like pick up the phone. Oh my God, pick up the phone, gosh.
Speaker 3:I and this is probably just a pet peeve of mine I cannot stand having a dialogue in an email.
Speaker 2:Well, the problem was it wasn't a dialogue, it was. It was they, honestly, were talking at cross purposes and I don't think the adjuster understood what, what the attorney was saying, and the attorney didn't understand what the adjuster was saying. And and yeah, and in this instance, you, as the adjuster, need to sit there and go. Son of a biscuit. He just wrote me back again. Um, before I sit there and type it off like I don't know what, you don't understand, which would be anger and don't use it, you pick up the phone and go. Can I talk to you for like 15 minutes? Yes, you know, pick up the phone, touch someone, as the yellow pages used to say, but do you have 15 minutes? Because I'm confused, I don't understand.
Speaker 3:Yeah, and don't get caught in that trap of nonverbal communication in your own method. Because, number one, it's very, very difficult for human beings to judge tone and and like content and people. When you read something, it's very different than hearing it, for for individuals and it can be perceived that you're dodging or hiding or you're angry and you may not actually be right, right. So be very careful about not doing the back and forth and batting the pickleball across the bed.
Speaker 3:So don't do that. Just pick up the phone. We need to have a conversation, let's talk, yes, then then you follow up that conversation with a letter or an email. Yes, yes, yes, what we talked about. Here's my understanding of what we talked about. Right, your thought process.
Speaker 2:Yes, and you've shown your consideration of the insureds or the claimants viewpoint and their interest, because that's another thing that I see. A lot is like oh, the insurance company is only paying attention to what they want to do, you know, blah, blah, blah. And no, I I realized that we're sending three or four emails in a space of five minutes. So something is wrong. We're not communicating anyway.
Speaker 2:So, yeah, even that going back and forth is not bad faith, you know. You just got to recognize and be self-aware of yourself to realize that I need to take a step back. Even if it's, I need to take a step back because I'm really angry and I need to, like you know, walk around the block for, you know, 15 minutes or whatever, before I come back and sit down and work on my 299 claims. So yeah, so I would, of course, encourage all of our adjusters or listeners because I think we have some agents actually listening as well to subscribe, share, drop your own bad faith or bad faith allegations in the comments. Um, share us on youtube, linkedin, spotify, whatever. Our next episode is going to be september 25th. I'm hoping we will have a guest. I haven't talked to them yet, so hope we will. If not, it'll just be you and me just chatting it up again.
Speaker 3:Yeah, definitely, and just be reassured that bad faith feels like the boogeyman folks. It really does, because you get a lot of chatter about it. The thing about bad faith is you just can't be complacent about it. The thing about bad faith is you just can't, you can't be complacent about it. But not every bad outcome and every single claim that you handle is automatically bad faith, and we've said it once, we've said it a thousand times today. It depends, folks.
Speaker 2:That's going to be the title, it depends, anyway. Well, thank you you, heather, we will see you in two weeks.
Speaker 1:Yes, yes, okay, great, see you then thanks for joining us on the art of adjusting podcast, where we talk about life as an insurance adjuster if you enjoyed this podcast or this episode, please give us five stars and a review.
Speaker 2:It does help the algorithm pick us up.
Speaker 1:Hit that subscribe button real quick and tell all of your adjuster friends to check this out as well. For independent adjusting services, go to wwwautenclaims, and for anyone interested in working as an independent liability adjuster, go to the contact us tab to join our roster. Go to the Contact Us tab to join our roster.
Speaker 2:In the meantime, you can contact me at theartofadjustingcom for consulting and training purposes.
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